International
Journal
of
Government
Auditing
April 2001—Vol. 28, No. 2
©2001 International Journal of Government Auditing, Inc.
The International Journal of Government Auditing is published quarterly (January, April, July, October) in Arabic, English, French, German, and Spanish editions on behalf of INTOSAI (International
Organization of Supreme Audit Institutions). The Journal, which
is the official organ of INTOSAI, is dedicated to the advancement of
government auditing procedures and techniques. Opinions and beliefs expressed are those of editors or individual contributors and do
not necessarily reflect the views or policies of the Organization.
Board of Editors
Franz Fiedler, President, Court of Audit, Austria
Sheila Fraser, Interim Auditor General, Canada
Mohamed Raouf Najar, Premier President, Court of Accounts, Tunisia
David M. Walker, Comptroller General, United States
Clodosbaldo Russian Uzcategui, Comptroller General, Venezuela
President
Linda L. Weeks (U.S.A.)
The editors invite submissions of articles, special reports , and news
items, which should be sent to the editorial offices at U.S. General
Accounting Office, Room 7806, 441 G Street, NW, Washington, D.C.
20548, U.S.A. (Phone: 202-512-4707. Facsimile:202-512-4021.
E-Mail: <[email protected]>).
Editor
Donald R. Drach (U.S.A.)
Given the Journal’s use as a teaching tool, articles most likely to be
accepted are those which deal with pragmatic aspects of public sector auditing. These include case studies, ideas on new audit methodologies or details on audit training programs. Articles that deal primarily with theory would not be appropriate.
Associate Editors
Office of the Auditor General (Canada)
Deepak Anurag (ASOSAI-India)
Luseane Sikalu (SPASAI-Tonga)
Michael C.G. Paynter (CAROSAI-Trinidad and Tobago)
EUROSAI General Secretariat (Spain)
Khemais Hosni (Tunisia)
Yadira Espinoza Moreno (Venezuela)
INTOSAI General Secretariat (Austria)
U.S. General Accounting Office (U.S.A.)
The Journal is distributed to the heads of all Supreme Audit Institutions throughout the world who participate in the work of INTOSAI.
Others may subscribe for US$5 per year. Checks and correspondence for all editions should be mailed to the Journal’s administration office, P.O. Box 50009,Washington, D.C. 20004, U.S.A.
Articles in the Journal are indexed in the Accountants’ Index published by the American Institute of Certified Public Accountants and
included in Management Contents. Selected articles are included in
abstracts published by Anbar Management Services, Wembley, England, and University Microfilms International, Ann Arbor, Michigan, U.S.A.
Contents
1
Editorial
3
News in Brief
6
Integral Auditing
10
Adjusting External Audits
14
Audit Profile: Nigeria
16
Reports in Print
17
Inside INTOSAI
20
Subscription Form
Assistant Editor
Linda J. Sellevaag (U.S.A.)
Production/Administration
Sebrina Chase (U.S.A.)
Finances
U.S. General Accounting Office (U.S.A.)
Members of the Governing Board of INTOSAI
Guillermo Ramirez, President, Court of Accounts, Uruguay, Chairman
Jong-Nam Lee, Chairman, Board of Audit and Inspection, Korea,
First Vice-Chairman
Tawfik I. Tawfik, State Minister and President, General Audit
Bureau,Saudi Arabia, Second Vice-Chairman
Franz Fiedler, President, Court of Audit, Austria, Secretary General
Arah Armstrong, Director of Audit, Antigua and Barbuda
Iram Saraiva, Minister-President, Court of Accounts, Brazil
Lucy Gwanmesia, Minister Delegate, Cameroon
Sheila Fraser, Interim Auditor General, Canada
Mohamed Gawdat Ahmed El-Malt, President, Central Auditing
Organization, Egypt
Hedda Von Wedel, President, Court of Audit, Germany
V. K. Shunglu, Comptroller and Auditor General, India
Abdessadeq El Glaoui, President, Court of Accounts, Morocco
Bjarne Mork Eidem, Auditor General, Norway
Carmen Higaonna de Guerra, Contralor General, Peru
Alfredo Jose de Sousa, President, Court of Accounts, Portugal
Pohiva Tui’i’onetoa, Auditor General, Tonga
David M. Walker, Comptroller General, United States
Planning for the XVII INTOSAI
Congress
By Jong-Nam Lee, Chairman of the Board of Audit and Inspection, Korea
Spring seems to be just
around the corner and the
warm weather will certainly
provide energy and inspiration
to the Secretariat of the 17th
INTOSAI Congress as we
prepare for the congress to be
remembered as one of the most
memorable ever.
Next, the Committee on Internal Control Standards,
chaired by the Hungarian SAI, reported on the outcome of the
Second International Conference on Internal Control held in
May 2000.
#1
It only seems yesterday
that the 47 th INTOSAI
Governing Board took place,
which all of the Board of Audit
and Inspection (BAI) staff
considered as the testing Mr. Jong-Nam Lee
ground for the Congress in
October 2001. We welcomed 24 Board member countries and
observers to the meeting, which was held successfully, and we
were pleased to receive very positive feedback from the
participants.
The meeting included active discussions on the reports
by INTOSAI’s eight standing committees and working groups
and other INTOSAI programs. Because of the importance of
their work, and because they will also report at the Congress in
October, I would like to share the following highlights of their
reports.
First, IDI submitted a strategic plan for the period 20012006 for future IDI training programs and activities. The plan
was based on the results of the survey conducted by the IDI.
In January 2001, the SAI of Norway assumed responsibility of
the IDI secretariat from the SAI of Canada.
The Auditing Standards Committee reported that their
activities will focus on two areas: first, restructuring of the
Auditing Standards, and second, developing guidance on the
implementation of the auditing standards. Chaired by Sweden,
the committee is planning to report the final version of the
INTOSAI Auditing Standards for approval at the 2001
Congress.
The Accounting Standards Committee, chaired by the
USA, reported on the drafting of “Accounting Standards
Framework Implementation Guide for SAIs Management
Discussion and Analysis of Financial, Performance and
Governance Information” by the year 2001.
The Public Debt Committee, chaired by Mexico, reported
on its various activities including publication of its two
guidelines, “Guidelines for the Planning and Execution of Public
Debt Audits” and “Guidelines for Public Debt Reporting.”
The Committee on EDP, chaired by the Indian SAI,
reported on its projects related to IT audits and asked SAIs
with experience in dealing with government regulation for their
assistance.
The Working Group on Environmental Auditing, chaired
by the SAI of the Netherlands, reported that all regions have
decided to organize their own Working Groups; they also
reported on the adoption of the final version of the booklet
“Guidance on Conducting Audits of Activities with an
Environmental Prospective.”
The Working Group on Privatization, chaired by the UK,
reported on the use of the privatization guidelines.
Finally, the Working Group on Program Evaluation,
chaired by France, reported that it will focus on, among others,
setting up the Working Group’s website and on developing a
report for submission to the 17th INCOSAI.
The INTOSAI Congress has always inspired the supreme
audit institutions of all member countries since our
organization’s first meeting took place in Havana, Cuba, in
1953. Since that time, each Congress has provided a new
guiding light to audit directions and technologies for the
improvement and enhancement of audit work.
In this respect, the Board of Audit and Inspection of Korea
is very proud to host the first INTOSAI Congress in the new
millennium. We believe that this Congress is timely in that
reform in the government sector has been actively pursued all
over the world. The themes of the 2001 Congress are:
Theme I: The Audit of International and Supranational
Institutions by SAIs.
Theme II: The Contribution of SAIs to Administrative and
Government Reforms.
Subtheme IIA: The Role of SAIs in Planning and
Implementing Administrative and Government Reforms.
International Journal of Government Auditing–April 2001
1
audit reform measures. It is expected that INTOSAI member
institutions will be able to apply Theme II recommendations
resulting from the 17th INCOSAI to making public service better.
INTOSAI member countries were invited to prepare
country papers and 47 member SAIs submitted country papers
for Theme I, while 50 countries submitted papers for subtheme
IIA, and 55 countries submitted papers for subtheme IIB.
#2
View of the Convention and Exhibitiion Complex in Seoul, venue of
the XVII INCOSAI. Pictured here are the Convention and Exhibition
Center, hotels, and World Trade Center.
Subtheme IIB: The Role of SAIs in Auditing
Administrative and Government Reforms.
Theme I will discuss creating and developing wellorganized and independent audit systems in international and
supranational institutions. Audit of international and
supranational institutions has been of interest to INTOSAI
members for more than the past forty years since it was
discussed at the second congress in Belgium in 1956. It is
expected that the discussions at the 17 th INCOSAI will
encourage international and supranational institutions to
improve and modernize their budgeting, accounting and
reporting system and to enhance their efficiency, effectiveness
and economy.
Theme II will deal with SAIs’ roles in administrative and
government reforms. Rapidly changing environment and
citizens’ calls for a small but effective government has caused
a number of countries to improve the quality of public service
through reform in the public sector. Theme II discussions will
explore the roles of SAIs in the reform process and how to
Now I would like to discuss in more detail the progress
made so far by the Secretariat as we prepare for the 17th
INCOSAI. The Congress will be held at the COEX (http://
www.coex.co.kr) and the COEX Intercontinental Hotel (http://
seoul.interconti.com/coeic_kr) where the third ASEM (AsiaEurope Meeting) was held in 2000. As for lodging, the
Secretariat has reserved rooms in several hotels to provide the
participants a variety of choices. In April, the official homepage
for the Congress will be opened. It is our hope that the
homepage will help INTOSAI member countries get access to
a variety of information they need in relation to the INTOSAI
Congress, including registration, theme papers, country papers
and comparative review papers so they can prepare for the
Congress discussions. In addition, the homepage will allow
convenient one-step on-line registration.
BAI’s hosting of the first Congress in the new millennium
has captured the interest of the public and the media as well.
Since Korea hosted the 47th INTOSAI Governing Board meeting
in May last year, the press has remained interested in the
progress made. The Korea Herald, one of the leading English
daily newspapers in Korea, published a three-page feature
section on the 17th INTOSAI Congress.
In closing, I would like to express my special thanks to all
of those who have provided unlimited support as we are
preparing for the Congress and would like to ask for continuous
assistance because all of your ideas and opinions are very
valuable to us.
Wishing you and your institution the best of health and
success, I look forward to meeting all of you in October in
Seoul! ■
For further information about the 2001 Congress, please
contact the XVII INCOSAI Secretariat, Board of Audit and
Inspection, #25-23 Samchung-dong, Chongro-ku, Seoul 110706, Korea (tel: ++82-2-7219-290; fax: ++ 82-2-7219-297,276;
and e-mail: [email protected]).
2
International Journal of Government Auditing–April 2001
News in Brief
Bangladesh
International Conference on
Improving Oversight Functions
The Office of the Comptroller and
Auditor General of Bangladesh in
cooperation with UNDP and the World
Bank hosted an International Conference
titled ‘Improving Oversight Functions:
Challenges in the New Millennium’
during September 10-12, 2000, in Dhaka.
The conference provided an important
forum for discussion, exchange of ideas,
and sharing of experiences on the key
issues involved in improving financial
oversight functions. The Honorable
President of the People’s Republic of
Bangladesh, Justice Shahabuddin
Ahmed inaugurated the conference,
which was also graced by the Honorable
Finance Minister Mr. Shah AMS Kibria.
Messages from Honorable Prime
Minister and Speaker were also received
and published in various National
dailies.
Parliamentarians, heads of SAIs,
professionals and policy makers,
including distinguished delegates from
20 countries spanning five continents,
attended the conference. Their active
participation was compelling testimony
to the importance and the timeliness of
this conference. The importance of the
topic was also reflected in the positive
and wide coverage received from the
national media.
In addition to the inaugural and
concluding sessions, three substantive
business sessions were held on
‘Parliamentary Control of Public Expenditure’, ‘Public Sector Auditing in
Bangladesh’ and ‘Accountancy Profession in Bangladesh.’ Significant
contributions were made by, among
others, Mr. John G. Williams, MP and
Chairman, PAC of Canada; Mr. Andrew
Feinstein, MP & Deputy Chairperson,
Audit Commission, South Africa; Dr.
Sario Bundihardjo Joedone, Auditor
General of Indonesia & President of
ASOSAI; Mr. P. J. Barrett, Auditor
General, Australia; Mr. V. K. Shunglu,
Comptroller and Auditor General, India;
Mr. Bishnu Bahadur K. C., Auditor
General, Nepal; Mr. Kunzang Wangdi,
Auditor General, Bhutan; Mr. S. C.
Mayadunne; Auditor General, Sri Lanka;
as well as by senior officials from the
SAIs of Canada, China, India, Indonesia,
Kuwait, Korea, Malaysia, the
Netherlands, Saudi Arabia, USA,
Northern Ireland and officials from the
World Bank.
Participants were unanimous that
strong oversight was the key to good
governance. The free flow of ideas and
exchange of experiences were valuable
in helping conference participants
formulate important recommendations
for improving financial oversight
functions in Bangladesh. The main
recommendations of the conference
were: Attitudes towards the activities of
Parliamentary Committees should
change; Parliamentary Committees
should scrutinize the budget before it is
passed; The work of Parliamentary
Committees should be visible and
transparent to the people; Meetings of
the PAC should be open to the public
and the media; The accounting and audit
functions of the C&AG’s office should
be separated; The tenure of the CAG
should be increased to a minimum of
five years and the constitution amended
accordingly; Need for amendments to
the companies Act, SEC Rules, Banking
Act, Insurance Act and by-laws of
professionals institutes to make the
standards mandatory on all public
companies and large private companies;
and, Training and entrance requirements
in the accounting profession should be
changed.
For more information, contact: the
Office of the Comptroller and Auditor
General, Audit House, 189, Shahid Syed
Nacerul Islam Sarani, Dhaka 1000,
Bangladesh, E-mail: [email protected].
#3
Hong Kong
Audit Report Issued
Distinguished speakers and leaders prepare for a session of the international conference cosponsored by the SAI and Bangladesh and the UNDP and World Bank.
The Director of Audit’s Report
No. 35, which includes the results of
value-for-money audits completed
between March and September 2000,
was submitted to the President of the
Legislative Council on October 30, 2000,
International Journal of Government Auditing–April 2001
3
and was tabled in the Council on
November 15, 2000. Subsequently, the
Public Accounts Committee (PAC)
tabled its report on the Director of Audit’s
Report in the Council on February 14,
2001.
Parliament in September 2000. The
Report is used by the Parliament’s Public
Accounts Committee as the basis for its
examination of the heads of public
service organizations on their
stewardship of public moneys.
The Director of Audit’s Report
contains twelve value-for-money audit
studies, including studies on: (a) the
Government’s efforts to control flooding
in urban areas; (b) Government’s support
and administration of kindergarten
education; (c) the use of employers’
returns and notifications for assessing
and collecting salaries tax; (d)
interdiction of government officers; (e)
Employees Retraining Scheme; and (f)
Comprehensive Redevelopment Program of the Housing Authority. Most
of the recommendations in the Report
have been accepted by the Government
and the PAC. Moreover, the studies
have identified some US$70 million of
savings and benefits to the Government
of the Hong Kong Special
Administrative Region.
The main issues included
shortcomings in the fight against tax
evasion; level of overpayments of social
welfare; poor management of Defense
Forces stocks; weaknesses in control
over the cost of a major IT system for
the Police Force; debt collection in the
Department of Agriculture; inefficiencies
in the processing and payment of civil
service pensions; and, effect of delays
in introducing a modern clearing system
for government cheques.
The Report’s findings have
prompted improvement measures to be
taken by the Government. For example,
the study on kindergarten education
revealed that there was a lack of control
on miscellaneous fees charged by
kindergartens. The PAC urged the
Administration to take expeditious
measures to strengthen the control on
miscellaneous fees, and to take actions
against those kindergartens which failed
to comply with the Education
Department’s guidelines on the charging
of miscellaneous fees.
For more information about the
Report, please visit Audit Commission’s
Internet Home Page at http://www.
info.gov.hk/aud/ or contact: Director of
Audit, Audit Commission 26/F,
Immigration Tower, 7 Gloucester Road,
Wanchai, Hong Kong, China, Fax: (852)
2824 2087, E-mail: [email protected].
gov. hk.
Ireland
1999 Annual Report
The Comptroller and Auditor
General presented his Annual Report on
the 1999 accounts of Government to
4
The complete Report is available on
the office website at http://www.irlgov.
ie/audgen or by writing to the office of
the Comptroller and Auditor General,
72076 St. Stephen’s Green, Dublin 2,
Ireland.
Malta
Year 2000 Activities
The Auditor General, besides
reporting annually on the workings of
the National Audit Office reports to the
Parliament on the accounts of
Government Ministries and Departments
and on Local Government. He may also
prepare audit reports on other bodies
administering, using or holding public
funds.
The mandatory and primary
objective of the NAO, in terms of the
Constitution and the Auditor General
and National Audit Office Act, is to
provide independent information,
assurance and advice to Parliament
about how Treasury, government
departments and certain non-central
government entities (particularly Local
Councils) account for and use public
funds. Another objective, in terms of
the Act, is to establish whether public
moneys have been used economically,
efficiently and effectively.
The Auditor General submitted his
1999 Audit Report to the Speaker of the
House of Representatives in November
2000. The Audit Report included a
number of shortcomings relating to
International Journal of Government Auditing–April 2001
errors in government salaries and
pensions, a substantial increase in
arrears of revenue due to government,
over-budgeted expenditure by a number
of Local Councils, breach of regulations
relating to allowances paid to public
officers traveling abroad, lack of clearly
defined benchmarks and performance
indicators in government Departments,
and deficiencies in the control of
government transport.
A number of value for money audit
reports were also published during 2000
and submitted to the Speaker of the
House. These included reports on the
internal audit function within government ministries, the VAT department
inspectorate unit, and the general
practitioners function within health
centers.
All Reports were automatically also
referred to the Public Accounts
Committee (a Committee of the House of
Representatives) which reviewed them
by holding hearings and summoning
witnesses.
NAO has participated actively in
the international sphere, particularly in
INTOSAI, EUROSAI, EU-related and
other foreign activities. One NAO officer
has been appointed as the subcoordinator of SAIs from the
Mediterranean region on audits and
studies relating to Environmental Audit.
Another officer is participating in the
Working Group Meetings for Liaison
Officers of EU candidate countries. The
Office is also a member of the INTOSAI
Committee on Accounting Standards.
Furthermore, the NAO has locally held a
number of meetings with foreign visitors
to exchange views on the National Audit
Office and discuss issues of an audit
nature.
In its endeavor to promote and
achieve professionalism, the NAO
accomplished an extensive training
program for both its experienced and
new staff during the last part of 1999
and into 2000. NAO has furthermore
been sponsoring those employees
willing to undertake courses to degree,
professional examination and diploma
levels. The Office also participated in
several local conferences and seminars
on varied issues relating to auditing,
taxation, IT and EU-related matters.
In the year 2000, the National Audit
Office continued with its recruitment
process. Its staff complement practically
doubled from 30 to 58 within one year.
Several of the new recruits possess or
are reading for degrees or other
professional qualifications in accountancy or related professions.
During 2000, the IT function at the
Office had to be expanded in order to
accommodate the increase in staff.
Existing equipment and software at the
Office were upgraded to latest standards.
An important milestone was the
launching of an Office Intranet whereby
information of a common nature and
interest started being shared by all NAO
staff. The Intranet, which was developed
by the IT unit of the Office, is being
updated and enhanced as an ongoing
project. The launching of an Internet
Website in the near future is expected to
further enhance the image of the NAO.
For more information, please
contact: National Audit Office, Notre
Dame Ravelin, Floriana CMR 02, Malta;
telephone: +356239659; fax: +356220708;
E-mail: [email protected].
Sweden
Annual Report and Accounts
In February, the Swedish National
Audit Office (RRV) submitted its Annual
Report and Accounts to the Swedish
Government. The publication will be
translated into English and should be
available upon request by the end of
June 2001. The RRV has audited the
accounts of some 450 government
agencies, organizations, foundations
and state owned companies.
Within the area of performance audit,
the RRV has primarily prioritized the audit
of new forms of operation and
deregulated markets. Another focus has
been to determine whether the
government agencies, within their
respective areas of responsibility, have
managed to maintain the state’s
responsibility in accordance with the
Government and Parliament’s goals and
demands, and the citizens’ right to rule
of law as well as efficiency and
effectiveness in government operations.
Good quality in its work is a
necessity for the RRV, and it has, during
the past year, continued its extensive
investments in continuous training of
the staff, in order to maintain a high and
even quality of work in the long run.
RRV’s aim is also to secure a stable
organizational capacity. In the Financial
Audit Department, the quality
certification of government auditors has
continued. In the year 2000, the RRV has
finished the measures deemed necessary
for quality assurance; defined the skill
requirements for financial auditors, and
the definition is the basis of the internal
training of auditors; and developed tests
conducted in cooperation with the
Supervisory Board of Public
Accountants.
In the Performance Audit Department RRV has, during the year 2000,
developed and defined the professional
profile of a performance auditor. We have
also taken measures to further increase
the capacity and skills of our
performance auditors; by arranging
training and seminars as well as by
integrating efforts in the audits, among
other things in the form of project
support.
For more information, contact the
Swedish National Audit Office, P.O. Box
45070, S-104 30 Stockholm, Sweden, Email: [email protected], website: http://
www.rrv.se.
United States of America
Combined Accountability and
Performance Report Provides
Look Back, Look Ahead at GAO
Operations
Heeding congressional calls for
consolidated information on federal
agency performance, GAO this week
sent Congress a streamlined report
encompassing its fiscal year 2000
accountability report and performance
report and fiscal year 2002 performance
plan.
In spite of its compact size (41 6x9inch pages), the performance and
accountability highlights report (GAO-
01-627SP, April 2001) contains a lot of
information. It discusses the key
measures of GAO’s performance during
FY 2000, including US$23 billion in
measurable financial benefits (a return
of US$61 on every dollar invested in
GAO), 788 actions taken to improve
government operations or services, 263
congressional testimonies, 1,224 new
recommendations, and 96 percent ontime delivery.
There are a number of specific
examples of GAO’s accomplishments,
presented in “GAO at Work” anecdotes,
as well as in one-page summaries of
GAO’s performance by each of the
agency’s four strategic goals. Looking
ahead, the report discusses the issues
GAO plans to address in fiscal year 2002
as well as its goals for the period and
strategies and challenges for achieving
them. A condensed version of GAO’s
financial statements, which received an
unqualified opinion from its independent
auditor, is also included.
The compact accountability and
performance document should meet the
needs of most parties who follow GAO’s
activities. But those who need more
detailed information can access the
complete texts of the FY 2000
accountability and performance reports
and the FY 2002 performance plan (GAO01-626SP, April 2001) on GAO’s Internet
site (www.gao.gov).
Comptroller General Walker used the
publication of the combined performance
and accountability report to send a
personal message to GAO staff
members. “It gives me the opportunity
to thank you once again for your
contribution to our agency’s
achievements during the past fiscal
year,” he said in a memo to all employees.
As part of its outreach effort, the
performance and accountability
highlights report is being distributed to
members of Congress and key staff
members, executive branch officials,
accountability organizations, and others
interested in GAO’s work.
For more information, contact:
External Liaison, U.S. General
Accounting Office, room 7806,
Washington, D.C. 20548 USA (tel: 202512-4704; fax: 202-512-4021; e-mail:
[email protected].). ■
International Journal of Government Auditing–April 2001
5
Integral Auditing
By Jameleddine Khemakhe, President de Chambre, Tunisian Court of Audit, and Tunisian Foundation for Comprehensive
Auditing
In recent years, the concept of auditing has evolved within
the context of rapidly changing political/economic conditions
and expectations about the proper role of government and
public management. Supreme audit institutions (SAI) have seen
their role change and diversify to include financial audits and
compliance audits, performance audits and value-for-money
audits, as well as comprehensive audits. Currently,
developments in public management and efforts to promote
good governance are moving SAIs to go beyond
comprehensive auditing to a new auditing philosophy and
approach—which I am calling “integral auditing.” This article
will outline the concept of integral auditing and discuss a
methodology for implementing it.
The experience of the Tunisian Court of Audit has mirrored
these international developments. For more than 15 years, the
Court has been carrying out audits to determine the extent to
which public activities and programs are managed in
compliance with laws and regulations, and with a view to
economy, efficiency and effectiveness. More recently, the Court
has also implemented the comprehensive auditing approach
pioneered in Canada and has been involved in research and
development in order to make an appropriate methodology
available to the magistrates of the Court.
However, changes in the socio-political environment in
Tunisia—in particular the democratization of public life, the
strengthened role of civil society, the desire to consolidate
governance, and multiple reforms of the public sector—have
led the Court to increased interest and involvement in other
aspects of public management.
In Tunisia and elsewhere, governments are being called
upon to uphold not only traditional values such as the equality
of citizens, neutrality, and the continuity of public service, but
also the principles of democratic management—the right to
information, transparency, respect for due process, the
responsibility to evaluate its actions, the accountability of civil
servants, the clarity of laws and regulations, the accessibility
of public services, the participation of officials in modernization
efforts, and the right to a healthy environment and legal
protection. Taxpayers are becoming increasingly critical and
are demanding that the government provide the quality services
to which they are entitled and respect their rights as individuals.
While public management is responsible for creating and
implementing systems and procedures that meet these
expectations, the auditor can make a significant contribution
to advancing governmental efforts in these areas.
6
International Journal of Government Auditing–April 2001
Using an integral audit approach, auditors can make
contributions to government policies and reforms at a variety
of levels—from conceptualization, to implementation,
evaluation, and impact assessment. This type of auditing goes
beyond the elements of the comprehensive audit to cover the
quality of strategic planning and the provision of services to
users. Thus, integral auditing involves active participation
throughout the cycle of government policy and reforms efforts.
Its main objective is to determine in a constructive manner the
extent to which resources are managed economically, efficiently,
and effectively with respect to the fundamental rights of the
citizen.
Since integral audit entails a new vision of auditing, it also
requires new roles for the auditor and a new approach to
auditing process.
Integral Auditing and the Auditor’s
Mission
In a comprehensive audit, the auditor is a guardian of
compliance with laws and regulations as well as a partner. In
an integral audit, the auditor’s role is also that of a facilitator.
The following sections describe each of these roles.
The Auditor—Guardian of Compliance
SAIs are traditionally the guardians of compliance with
laws and regulations. In most cases, however, this role is defined
narrowly to include only the government’s compliance with
laws and decrees that determine the rules of administrative
and financial management. However, the rule of law, the
fundamental principle of any democratic system, calls for a
broadening of this definition.
Currently, the scope of SAIs’compliance audits is
expanding to cover other aspects of compliance related to the
relationship between governments and citizens that are laid
down in the constitutions of different countries and in
international agreements. In addition to examining legal
compliance, the auditor addresses other equally important
issues, such as equality before the law and government
services, the transparency of institutions and decisions, the
establishment of institutional mechanisms for consultation and
participation in decision-making, and the recourse to
consultations on major issues. These elements should
constitute permanent objectives in SAIs’ strategic and
operational planning and all auditing missions.
The Auditor as Partner
•
the equitable and equal treatment of users;
This mission was initiated in the context of comprehensive
auditing. For the auditor it consists of evaluating the methods
and practices the government uses to fulfill the missions and
mandates with which it has been entrusted, as well as providing
an opinion on the realiability of financial statements and
managers’ reports. In this framework, the auditor-adviser has
an important role in supplying reliable, significant, and relevant
information to different clients (such as the manager, company
director, the executive, and legislature) that will allow them to
judge the validity of the information they receive as a basis for
decision-making. The auditor also formulates recommendations
intended to improve the management of the auditee’s activities.
•
the availability of information on the use of public
funds; and,
•
the extent to which government activities provide
quality services and ensure better social and regional
outreach to the underprivileged.
Improving management thus becomes a joint task
undertaken by the auditor and the manager. Their shared
objective is arriving at sound management practices that allow
the community or the organization to gain maximum value for
the resources used.
To carry out this role, the auditor not only examines
financial statements and audits the compliance of government
actions with the legislation and regulations in force, but also
carries out value-for-money audits. Value-for-money auditing
has introduced a new vision of the “auditing/control” function
that the auditor shares with the manager. In this context, the
auditor acts more like a true partner in setting up quality
management in the public sector. In fact, value-for-money
auditing demonstrates the importance of the partnership
between the auditor and manager. As an adviser, the auditor
can carry out an objective and constructive process to
persuade the persons responsible to implement the desired
changes and contribute to management improvements.
The Auditor as Facilitator
The concept of the auditor as facilitator is a new function
introduced by integral auditing. In this function, auditors
employ the capabilities and skills they have accumulated
throughout their professional auditing careers to reflect on
public strategies and policies and on the emphases and
directions of government. This contribution can be made in
two different ways.
First, SAIs’ strategic and operational planning can address
the major reforms undertaken in the country and evaluate the
manner in which they have been implemented. This allows the
SAI to draw conclusions about shortcomings and weaknesses,
the quality of the work involved in drawing up these reforms,
and certain key aspects of modernizing government and
promoting human rights. In this context, the auditor-facilitator
raises questions linked to citizens’ rights, such as:
•
how national strategies and policies match users’
needs;
• the implementation of mechanisms which allow citizens
to participate in representative structures to decide
national strategies and policies;
The auditor-facilitator also promotes the government’s role
as a service-provider at the disposition of citizens, rather a
“controller” with all the means of legal constraint to put citizens
in a position of weakness and subjection. Thus, the auditorfacilitator helps to ensure that government is organized so that
it satisfies citizens’ demands, particularly in terms of ensuring
honest, prudent use of taxpayers’ money; support of public
authorities; and fair and impartial management of public affairs.
Within government itself, the auditor-facilitator helps ensure
that human resource management is based on the values of
work, accuracy, and excellence, and that these values are based
on dialogue and the free interchange of ideas.
Second, SAIs are regularly called upon to participate on
committees responsible for drawing up reforms or general
policies and to give advice on reform projects. In this context,
SAI auditors supply information drawn from the experience
and knowledge acquired in the course of their operational
activities. They do not take part in decision making. Thus, the
auditor-facilitator can draw attention to weaknesses in the areas
examined and will be in a good position to launch new ideas
related to modernizing government and protecting users’ rights.
A Methodological Approach to Integral
Auditing
Over the last decade, audit institutions have been
concerned about extending their audits to include an
assessment of performance. Adopting an integral auditing
approach will help audit institutions to address this concern.
Traditional value-for-money auditing is concerned with
the reliability of financial statements, sound financial
management, and the economy, efficiency and effectiveness
of management. It begins at the level of knowledge about the
entity—the nature of its operations; how it is organized; how
its main structures function; and how members of senior
management direct, control and record operations and activities.
Gaining an understanding of these aspects enables the auditor
to focus on key aspects of the entity’s management, placing
special emphasis on risk evaluation and establishing auditing
criteria, two critical factors in value-for-money auditing.
In the integral auditing framework, however, the auditors
intervene once administrative strategies and policies are being
implemented. Inputs by the auditors would, however,
indisputably be useful when these strategies and policies are
being formulated. Furthermore, in value-for-money auditing,
auditors do not address another important phase: impact
assessment, which is particularly important when evaluating
International Journal of Government Auditing–April 2001
7
the performance of public entities. While these two phases do
not always have a direct link with the audited entity, auditor
involvement in them would give the auditing operation an
integral character. Furthermore, the SAIs would also have the
capacity to judge the quality of the strategies and policies
adopted by means of the various reviews they carry out
throughout the year.
Contributions to Conceptualizing and Implementing
Reforms and Strategies
A rigorous and scientific approach to conceptualizing and
formulating public reforms and strategies is critical and has a
great impact on their success. Before determining what major
activities should be undertaken to modernize management of
public affairs, the government needs to agree with both its
partners and the users of its services on the diagnosis and
evaluation of its performance. Only then can the fundamental
choices about reform strategies be determined democratically
and the best way to implement those choices be defined in
concrete terms.
At this stage, SAIs can be the partners of choice because
of their independence, their objectivity, their experience, their
staff’s professionalism, and their structured evaluation
methodology. The SAIs can contribute to evaluating
government performance through the reports, observations,
and recommendations made at the time of various auditing
operations. They can help identify the constraints that prevent
government from obtaining value-for-money. SAIs also
constitute a credible source of information on the performance
of administrative structures both in terms of the quality of
services and the cost. In the end, SAIs are in the best position
to evaluate the compliance of proposed global strategies with
laws and regulations and to accurately evaluate the resources
needed for implementation in terms of investments to be made
or of costs to be borne.
At the implementation stage, SAIs can concentrate on
promoting respect for the major principles of democratic
management: transparency, continuity of management and
organization, efficiency, balanced input-output ratios, and
equity that avoids the abusive or arbitrary use of power. In
fact, through external, objective, and constructive audits in
which they schedule and implement value-for-money audits
and evaluations of different government sectors, SAIs may be
the only entity in a position to monitor that these values are
respected when public reforms are implemented.
Furthermore, because of their experience, SAIs occupy a
unique position among those institutions capable of
contributing to reduced and “lean” administration, simplified
procedures, decentralization, promoting quality actions within
government, and determining areas in current laws and
regulations that are not transparent. All of these factors affect
not only the effectiveness of the legal system but also the
proper functioning of democracy.
8
International Journal of Government Auditing–April 2001
Contributing to the Impact Assessment Phase
Impact assessment has a democratic objective: assessing
the public sector’s actual performance and promoting
accountability to the citizens of a country. Because of its
analysis of results, impact assessment goes farther than valuefor-money auditing. It seeks to throw light on all the effects of
a policy or program and reveal causal relationships between
the effects observed and the action implemented by the public
sector.
Public entities are responsible for setting up internal
assessment systems that enable them to be accountable for
the results of their actions, the use they have made of the
resources allocated to them, and their success in achieving
their goals. In addition to evaluating these internal control
systems, which is a part of value-for-money auditing, SAIs, by
virtue of their objectivity, independence and external focus,
are well-positioned to carry out an impact assessment. This
can be done either by evaluating the products of the impact
assessment function the government has developed within its
structures, or by the SAI carrying out impact assessments on
its own.
This task may revert to the SAIs for governments of
developing countries that are not yet equipped to develop the
evaluation/assessment function in their management structures.
In these cases, the SAIs have the experience and available
human resources to initiate this process of evaluation/
assessment and to accustom auditees to this type of activity.
Impact assessments carried out by SAIs will be effective if
certain conditions are fulfilled. First, it is essential that there be
legislative empowerment and the commitment of top SAI
management to this type of activity. A clear, agreed-upon
philosophy stating the general policy and aims of impact
evaluation operations must be developed.
Second, the SAI must have expertise in value-for-money
auditing and the versatile, experienced, and motivated human
resources required to incorporate the impact assessment into
their traditional tasks. Specifically, SAIs should be able to:
• program and select relevant subjects of concern for
those governing or for the country;
• organize its structures in a functional manner allowing
it to adapt to a diversity of subjects; and,
• mobilize a multidisciplinary, motivated staff that will
benefit from ongoing quality training.
Finally, the SAI must develop a general methodological
framework that is inspired by existing value-for-money audit
techniques and that takes into account the requirements of
impact assessment operations. It would be easy, for example,
to introduce an additional evaluative stage in the existing SAI
audit methodology. It is essential to find a way of guaranteeing
a “successful marriage” between traditional auditing
techniques (financial regularity, compliance, and value-formoney) and techniques encountered in impact assessment
operations.
Conclusion
The task of adapting public administration to the rapidly
changing socio-economic environment is not the exclusive
domain of political decisionmakers and managers. It is a
collective task they can share with supreme audit institutions,
and both partners have important roles to play. While managers
are in the best position to evaluate how they manage and the
results of their actions, SAIs can set up a process to review
management systems and practices, introduce changes in
approach, and orient government towards the needs of the
citizen-client.
SAIs are currently being called upon to go beyond
comprehensive auditing and play the role of facilitator. They
are being asked to provide input when strategies and policies
are being worked out and to incorporate an impact-assessment
phase into their auditing tasks to evaluate government
performance more precisely. Thus, SAIs can supply objective
and accurate information that can be of use first to managers
and then to other public authorities and citizens.
In working to help public authorities guarantee transparent,
responsible, participative, and equitable management of the
country’s resources in order to achieve sustainable economic
and social development, SAIs will make an undeniable
contribution to the promotion of good governance. They will
also help consolidate the rule of law and reinforce respect for
citizens’ rights.
For more information, contact the author at the: Cour des
Comptes, 54 Avenue Bilal, Menzah VI, 1004 Tunis, Tunisia. ■
International Journal of Government Auditing–April 2001
9
Adjusting External Audits to Facilitate
Results-Oriented Government
By Matthew Andrews, Maxwell School, Syracuse University
Introduction
Auditing involves evaluating and reporting on
organizational behavior. In the public sector, such evaluation
and reporting has traditionally focused on short-term financial
management and control, and central concerns of public
accountability. Recently, governments have extended their
accountability focus to include concern for long-term
management issues and public sector performance (See Bourn,
2000 regarding the emphasis on Improving Public Services).
The emphasis of this results-orientation has been on resultsoriented management, however, and not on evaluations—the
concern of auditors. This article discusses new challenges to
government auditing arising from this extended accountability
concept and argues that credible external auditors have a central
role in results-based reforms.
(as in the United Kingdom’s financial and compliance audits)
remains, but it is also important to shine the evaluation light on
results (as in the United Kingdom’s value-for-money audits)
and the progress of results-oriented reforms. Evaluating these
three factors ensures that all receive attention from managers,
as shown in figure 1.
I will concentrate on the issue of auditing performance
and performance-related reforms, discussing lessons learned
in extending results-oriented government beyond management
to incorporate evaluation and auditing. Such results-oriented
evaluations and audits are central in motivating and facilitating
results-oriented government.
The Results Movement and the
External Audit Function
A popular quote in management literature is, “ What gets
measured gets done.” Put another way, the focus of evaluation
creates incentives for management. The quote is particularly
relevant in considering adjustments needed in the external audit
domain to facilitate results-oriented government. The audit
function has traditionally focused on process and financial
control, measuring adherence to rules and the ability to spend
within budget, and failing to measure aspects of management
relating to the efficiency and effectiveness of spending. In
many governments, it is apparent that such evaluations (and
the broader financial and management systems they reflect)
are associated with the short-term focus of administrators—
an emphasis on how much is spent instead of what is
produced—and other inefficient managerial practices.
Such behavior is at odds with the recent move to resultsoriented government, with its focus on what is produced and
on aspects of efficiency and effectiveness. In order to overcome
this short-term focus, external auditors are challenged to focus
on those factors that drive the kinds of behavior associated
with efficient and effective government. The need to
concentrate on traditional financial and process accountability
10
International Journal of Government Auditing–April 2001
Ignoring one or more of the factors in external evaluations
gives internal administrators the message that such factors are
unimportant and leads managers to concentrate their efforts
elsewhere. This is currently a problem in a number of
governments that are attempting to shift their focus from
process to performance but are concentrating on managerial
issues and not on evaluations. In such situations, managers
are receiving a conflicting message: “Manage for results…but
remember that you will be audited on your adherence to process
(not on the results)”. Public auditors have an important role to
play in clarifying the results-oriented message in governments
around the world. This role involves evaluating results so that
their importance is clearly evident to the many managers
targeted by results-oriented management reforms.
Adjusting the External Audit Role to
Ensure a Results-Orientation
Developing and developed countries are at the same point
in setting up independent, results-oriented evaluation
institutions. In the United States, a relatively young
organization, the National Association of Local Government
Auditors (NALGA) promotes independent, effective local
government auditing and is a model for other countries (Niesner,
1997). Along with similar organizations, the organization is
characterized by a number of significant elements:
• It is independent and offers an objective approach to
results auditing.
• Its staff is both competent and committed, with wideranging skills.
• It evaluates results, efficiency, and reform progress.
• While being independent, it works with the entities it
evaluates, developing relationships and ensuring that
the evaluation experience is as much one of learning as
one of grading.
These characteristics, and the experience of external
evaluators in other results-oriented governments, provide a
number of lessons for countries attempting to ensure that the
external audit domain plays an active role in facilitating resultsoriented management and evaluation in government. These
lessons are summarized in the following sections.
(2) the degree to which results can be ascribed to public
production (or the external environment), and (3) the continued
relevance of results targets. External audits and evaluations
should make suggestions about both future resource
allocations to cost centers and managerial activities in cost
centers, focused on improving results in the future. Potential
questions include the following:
Results targets:
•
Were clear and realistic objectives specified in the
budget?
•
Are these objectives specified in terms of outputs and
related directly to outcomes?
Results achievement:
•
• Have objectives been met in terms of outcome targets?
•
To what extent was performance the effect of
government action?
•
How did the environment affect output and outcome
performance?
•
What environmental factors had the greatest effect on
performance?
•
Have there been any unforeseen results for other
administrative entities?
Ensure the Independence of External Auditors
External evaluation agencies must be independent to
maximize the effectiveness of the checks and balances
necessary for effective evaluations. In the most effective cases,
external evaluators are audit agencies that report to higher
level governments (in the case of local governments with
results-oriented contracts tied to intergovernmental grants),
elected officials, or the public. Central coordinating agencies
or legislative committees often fulfill this role.
The continued relevance of results targets:
•
Are the output and outcome objectives still relevant in
terms of broader policy objectives, economic
conditions, and environmental factors?
•
Is the existing policy still the right one for meeting the
results objectives (particularly the outcome objectives)?
Will high performance in terms of outputs yield high
performance in terms of outcomes?
Ensure the Broad Competence of External Auditors
The expansion of audit services requires diverse skills in
evaluation and audit agencies. Skills and experiences required
include performance measurement, benchmarking, control selfassessment, activity-based costing, information technology,
investigations, and strategic planning. These skills are similar
to the skills required for results-oriented management, which
suggests that the central coordinating agency or other entity
providing such services to departments could also play a
capacity-building role in less capable entities.
Ensure the Results Focus of External Auditors
Most external auditors have established methods of
evaluating fiscal probity but do not have abilities in measuring
other aspects. Auditors should question the kind of results
targets in place, ensuring that these targets relate to outputs
(short-term measures directly related to production) as well as
to outcomes (short- and long-term measures that result from
outputs and constitute the closest point of public sector impact
in society). Questions should also be asked about (1) how
well results targets have been met (both outputs and outcomes),
Have results (particularly outputs) been achieved as
specified?
Audit and evaluation products in terms of results:
•
How should budgetary allocations be adjusted given
the performance of the administrative agency and the
relevance of their objectives?
•
What steps should be taken to improve objectives and
results targets?
•
What lessons are evident, and how can capacity be
developed, for improving management of the
department under evaluation?
Ensure an Efficiency Focus of External Auditors
Along with questions about results, auditors and
evaluators should ask questions probing administrative
International Journal of Government Auditing–April 2001
11
efficiency. These questions should focus on the process
(managerial efficiency), allocation (allocative efficiency), and
cost (economic) efficiency of administrative production.
Potential questions include the following:
Managerial efficiency:
• Are departmental processes transparent?
• Does production follow planned amounts, timing, and
quality, and are all inputs accounted for in financial
records?
Allocative efficiency:
• Does the administration explain why new projects and
programs were selected?
Evaluating the adoption of the reform:
• Are these mechanisms being used?
• Does the department communicate with customers on
a regular basis? How does it communicate? What
does it do with the information received from customers?
• Have departmental performance goals been improved
upon? Have departmental capacities to produce results
been expanded?
Evaluating the Influence of the Reform on the
Organization’s Culture:
• Does the administration have to motivate new program
selection with specific information? What is that
information?
• Is the reform considered important in the department?
Does the internal management have any alternative
reform ideas?
•
• Is the management implementing internal changes to
the departmental culture?
Are results taken into account when allocative
decisions are made?
Cost efficiency:
• Have all inputs been included in the cost assessments
(including direct inputs, capital, overhead, and support
inputs)?
•
How much of the input was wasted (irrelevant or
unsuccessful projects, avoidance, deadweight costs,
and/or unused capacity)?
• How do input requirements compare with those of
comparable producers?
•
What is the cost of a unit of output (distinguish
program administration cost)?
• How effective are cost evaluation and management
practices? Has there been an improvement in cost
efficiency?
• Were there any complaints about the administration?
Ensure that External Auditors Evaluate Reform
Progress
Experts in budget reform have learned that most reforms,
though carried out mechanically, do not actually influence
organizations in a de facto sense. Organizations like
governments need incentives to adopt reforms meaningfully,
and the external audit function is a source of such incentive.
Evaluating reform progress is central to ensuring reform
success. Questions suited to this task include the following:
Evaluating the reform mechanics:
•
12
• Has the department implemented any new management
mechanisms?
Has the department adopted a strategic plan to
concentrate on results?
International Journal of Government Auditing–April 2001
• Is the reform strategy comprehensive, building on a
base of social interaction and focusing management on
results? (Or is it made up of stand-alone elements)?
Ensure that Auditors Also Play a CapacityDevelopment Role
External auditors should also help in overcoming the
tension between external evaluators and administrators
attempting to adjust their behavior from the process-orientation
to the results-orientation. Neither administrators nor auditors
are currently well equipped to stand alone in focusing on
results. There is a high potential for conflict between those
having to produce results (without the established ability to
do so) and those having to evaluate results (also without the
established ability to do so). Auditing bodies are often
centralized and enjoy significant resource and skill benefits
over conventional administrative bodies. Given this, resultsoriented reform requires that at least in the opening stages of
results-based reform, evaluators provide a service that extends
beyond checking on managers to actually working with
managers to identify results targets and to manage around
such targets. Niesner (1999,36) sums this sentiment up by
saying, “Government auditors are uniquely positioned to
promote performance measurement and performance
accountability and to help ensure that these systems are used
to improve government services.”
Conclusion: A New Role for a Central
Role Player
Recent changes to the perspective of governance demand
that public audits extend their scope of investigation and
analysis. Established practices focused on short-term money
management need to be augmented by a new concentration on
the management and operational performance of departments
in using resources to meet stated results (Davies and Shellard,
1997). These additions are results-oriented audits that
constitute both institutionalized checks on production
performance and motivating factors facilitating progress with
results-oriented reforms. The external evaluations encourage
change and provide direction for capacity and reform
development, bolstering results-oriented management with
results-oriented evaluation.
References
Davies, Marlene, and Elaine Shellard (1997). “The Value
of Performance Measurement in the United Kingdom.” The
Government Accountants Journal, Vol.#46, Issue 3, 48-51.
Niesner, Helen (1999). “Local Government Auditing—
Improving the Performance of Government in the Next
Century.” The Government Accountants Journal, Vol.#48,
Issue 4, 32-38.
For further information, contact the author at: Public
Administration Department, Maxwell School, Syracuse
University, Syracuse, New York 13244, e-mail:
[email protected]. ■
Bourn, Sir John (2000).“Improving Public Services.” The
International Journal of Government Auditing, October: 1-2,
8-9.
International Journal of Government Auditing–April 2001
13
Audit Profile: Office of the Auditor
General for the Federation of Nigeria
By Florence N. Anyanwu, Chief Auditor
The 1999 constitution of the Federal Republic of Nigeria
divided the government into three separate but equal arms: the
Executive (Presidency), the Legislature (the House of
Representatives and the Senate), and the Judiciary.
The Auditor General for the federation is the head of the
supreme audit institution (SAI) and is responsible to the
Legislature but also takes directives from and cooperates with
the Presidency in matters relating to the audit of government
accounts and agencies.
Organization of the SAI
The SAI is divided into four operational departments.
1. The Ministerial Department deals with the audit of
accounts of ministries and other agencies of government and
all financial statements.
2. The Extra-Ministerial Department is responsible for
vetting the audited accounts of government companies,
corporations, agencies, commissions, and other authorities.
3. The Project Monitoring and Evaluation Department
conducts value-for-money and performance audits. These
involve examining and reporting on the economy, efficiency,
and effectiveness of government projects and programs.
4. The Revenue Audit Department is responsible for
auditing revenue accruable to the government. In this regard,
efforts are made to ensure that the revenues collected from all
sources are properly accounted for.
The SAI also has the following internal service
departments: Finance and Administration, Planning, Research
and Statistics, and Training. Each department is headed by a
director and has deputies and assistant directors to coordinate
the work of chief auditors heading audit offices in ministries
and government departments.
In order to ensure transparency, accountability and
credibility, an internal audit unit, headed by a high-level auditor,
is responsible for auditing the SAI’s management.
The Functions and Independence of the
SAI
The functions and scope of independence of the SAI are
spelt out in the relevant provisions of the Audit Act of 1958,
14
International Journal of Government Auditing–April 2001
which established the office, and in subsequent constitutional
provisions, particularly the 1999 constitution. These
provisions—together with section 24 of the Finance (Control
and Management) Act of 1958, the Financial Regulations of
1976, the Audit Guide, the Audit Standards and the Civil Service
Rules—have emphasized, guided, and increased the scope
and the independence of the auditing process.
These statutory documents, especially the current
provisions in the 1999 constitution, impose certain duties and
responsibilities on the SAI. For example, Section 85(2) states:
“The Public Accounts of the Federation and of all Offices
and Courts of the federation shall be audited and reported on
by the Auditor General, who shall submit his report to the
National Assembly; and for that purpose, the Auditor General
or any person authorized by him in that behalf shall have access
to all the books, records, returns and other documents relating
to these accounts.”
Ironically, the Auditor General is not authorized to audit
the accounts or appoint auditors for government statutory
companies and corporation. The Auditor General, however, is
to provide such bodies with
• a list of qualified auditors from which they shall appoint
their external auditors,
• guidelines on the levels of fees to be paid, and
• comments on their annual account and auditors report.
On the other hand, Section 85(4) further states that “the
Auditor General shall have power to conduct periodic checks
of all government statutory corporations, commissions,
authorities and agencies.” In recognition of the SAI’s need for
independence in performing the aforementioned functions,
Section 85(6) states; “In the exercise of his functions under
this constitution, the Auditor General shall not be subject to
the direction or control of any other authority or person; and
shall be appointed by the President on the recommendation of
the Federal Civil Service Commission subject to confirmation
by the Senate and shall be removed from office by the President
acting with and supported by two thirds majority of the Senate”.
The SAI head can be removed only on constitutional
grounds of serious incapacitation or improper conduct.
Reporting
The SAI is required by law to forward annual reports to
each house of the National Assembly. The annua1 report
includes accounts relating to revenues and losses of the federal
government and expenditure moneys appropriated by the
Legislature.
In each house of the National Assembly, reports are
considered by the respective Public Accounts Committee, which
in turn can make recommendations and impose sanctions and
punishment for corrective purposes.
Human Resource Development
The emergence of a new democratic order in Nigeria has
increased the demands on the SAI in carrying out its
constitutional duties. Consequently, it has to ensure that its
staff is qualified and adequately trained to meet these current
challenges. Presently, the federal civil service, in collaboration
with different levels of SAI management, is responsible for the
recruitment, promotion, and discipline of staff. Auditors are
recruited from varying and complementary disciplines. There
are about 2000 professional and non-professional staff.
Retraining of audit staff is an ongoing process. Training is
carried out through on-the-job training, joint workshops, and
seminars. Each year, some middle-level staff are sent to the
Federal Treasury School, and some senior staff are trained
abroad in Britain and in the U.S. General Accounting Office.
There is a training department under the Auditor General’s
direct supervision.
Future Challenges
The computer unit of the SAI is still in its infancy. The
SAI’s information database needs to be increasingly
computerized to ensure unrestricted access to-relevant
information, continuity of work, and a review of audit standards.
Another challenge is to initiate legislation to create an Audit
Service Commission, which will be mandated to recruit, promote,
and discipline audit personnel. Furthermore, the SAI needs to
be funded directly from the Legislature and not by the Executive
branch.
For more information contact: Office of the Auditor General
for the Federation, Plot -849 Koforidua Street, Off Michael
Okpara Street, Wuse Zone 2, Abuja FCT, Nigeria, telephone
234-9-5237792, facsimile 234-9-523-5322. ■
International Journal of Government Auditing–April 2001
15
Reports in Print
The World Bank’s report entitled Helping Countries
Combat Corruption will be of interest to Journal readers who
may be interested in minimizing fraud and corruption. Produced
as a joint effort of the Poverty Reduction and Economic
Management Network and the Operational Core Services
Network at the World Bank, the report details the progress
made by the World Bank Group on it anticorruption and
governance initiative which was launched by President James
D. Wolfensohn in 1996. Several articles are presented on (1)
approaches to combating corruption, (2) minimizing fraud and
corruption, (3) helping countries that request assistance, (4)
mainstreaming corruption considerations, and (5) supporting
international efforts to address corruption. To obtain a copy
of this publication, contact The World Bank 1818 H Street,
NW, Washington, DC 20433 U.S.A. (tel: 202-477-1234 or
fax: 202-447-6391), or e-mail: [email protected].
*****
The Audit of Public Health-Care Systems by Supreme
Audit Institutions containing papers from the 14th UN/INTOSAI
Seminar on Government Auditing is now available. Over 50
persons attended this seminar that addressed prevention of
irregularities in government health-care programs, the audit of
health-care programs, the audit of hospitals by SAIs, the
performance audit of the provision of public health-care services
in economically and socially deprived areas, the audit of social
security in France, and the European union financial activities
in the medical field. For a copy of the report or more information
on the seminar, contact the INTOSAI General Secretariat,
Rechnungshof, Dampfschiffstrasse 2, A-1033 Vienna, Austria
(tel: 43-1-711-71-8456 or fax: 43-1-712-9425), or e-mail:
[email protected].
*****
The Swedish National Audit Office (RRV) has published
an audit guide for its Financial Audit Department. The new
Audit Guide is a very important tool for insuring that the quality
assurance of audits is met, and for use in human resource
developments in the field of financial audit. Although the
Audit Guide is intended for daily use by the RRV’s financial
auditors, it provides readers around the world with information
on ethical rules, quality of work, organization and management,
and steps to follow for the actual audit process. To obtain a
copy in Swedish or English, contact the Swedish National
Audit Office Box 45070 SE-104 30 Stockholm, Sweden (tel:
46-8-690-40-00), e-mail: [email protected].
*****
Journal readers may be interested in obtaining the book,
Public Audit, Good Governance and Accountability. Edited
16
International Journal of Government Auditing–April 2001
by B. P. Mathur with contributions from R. Venkataraman former
President of India, and V.K. Shunglu, Comptroller & Auditor
General of India, this book contains distilled experiences of
eminent experts and focuses attention on critical issues relating
to effective function of public audit and the institution of the
Comptroller and Auditor General. The book recognizes that
the concept and establishment of auditing is inherent in public
administration, and in keeping with the changing role of
government, public audit has broken away from the traditional
function of auditing to the evaluation of government programs.
To obtain a copy of the book for USD$20, contact the Institute
of Public Auditors of India, Mudrit Publishers 70, M Block
Commercial Complex, Greater Kailash II, New Delhi India
110048 (tel: 91-11-646-2309, or 91-11 646-3068); fax: 9111-6444169.
*****
The rapid developments in China have given rise to
complex and challenging problems for auditing and accounting
professionals, and as such, China has become the subject of
scholarly studies and academic research. The Department of
Accounting of the Hong Kong Polytechnic University has
published the China Accounting Finance Review (CAFR)
which provides timely, high quality, and readily accessible
information on accounting in China to academics worldwide.
A bi-lingual journal (in English and Chinese), CAFR focuses
on publishing original papers on research and developments
of financial accounting, auditing, management accounting,
financial management, and taxation on China. CAFR is
published by Oxford University Press. To obtain a copy, contact
CAFR Office, Department of Accountancy, The Hong Kong
Polytechnic University Kowloon, Hong Kong (tel: 852-27664372 or 2766-4359; fax: 852-2764-2340.)
*****
The Technical Cooperation Among Developing Countries
unit (TCDC) within the UNDP has published another edition
of its periodical, Cooperation South. This issue of Cooperation
South offers a two-part focus, by presenting innovations in
development policy and performance, while also providing
critical reviews of large global issues. The Number Two 2000
issue examines key global issues such as the AIDS epidemic in
Africa and the availability of health services. Other articles
explore experiences in developing policy and performance
which can benefit developing countries as well as aid programs.
Published in English, French, and Spanish, Cooperation South
may be ordered by contacting the Special Unit for TCDC,
United Nation’s Development Programme, One United
Nation’s Plaza, New York, NY 10017, USA, or by sending a
fax to 212-906-6352. ■
Inside INTOSAI
Get Connected!
The INTOSAI internet web site www.intosai.org contains
a wealth of useful information about INTOSAI’s many programs
and activities, including the work of the organizations eight
technical committees, information about IDI, copies of this
Journal, as well as numerous publications which can be
downloaded at no cost.
In addition, the site contains a complete mailing list for all
INTOSAI members, including their e-mail addresses and
internet sites. This information is updated daily by the General
Secretariat, and is the ‘place to go’ for the most current
information about INTOSAI’s activities.
INTOSAI’s Internal Control Standards
Subcommittee Meeting in Budapest
The Subcommittee of INTOSAI’s Internal Control
Standards Committee held its last meeting for the year 2000 in
Budapest on November 28. Representatives of the SAIs of
Austria, Belgium, the Czech Republic, Hungary, the Netherlands,
Oman, Romania, the United Kingdom, and the United States
attended the meeting.
The delegates agreed upon the following issues.
2. Information about the possibility of modifying
INTOSAI’s “Guidelines for Internal Control Standards”
and working out proposals for the XVIIth INTOSAI
Congress.
•
The Subcommittee accepted and approved the report
on the possibility of modifying the Guidelines.
•
Members of the Subcommittee unanimously agreed to
propose to the Committee that the modified guidelines
should
1. Information about the activities of the Internal Control
Standards Committee carried out following the 2nd
International Internal Control Conference and future tasks.
• focus on combining and integrating the COSO
model into the guidelines,
• The proceedings of the conference were completed on
time and sent out to all INTOSAI members as well as 17
international organizations.
•
The Chairman of the Internal Control Standards
Committee forwarded to the cognizant organizations
proposals made during the conference concerning two
other INTOSAI organizations. The first, a Russian
proposal regarding the protection of auditors, was
forwarded to the Secretary General of INTOSAI. The
second, a proposal about protecting internal auditor
reports against hackers, was forwarded to the Chairman
of the EDP Committee of INTOSAI.
•
Members of the Subcommittee suggested that
following the XVIIth INCOSAI Congress, the
Committee should deal with the proposal concerning
the importance of the Audit Committee and organize
seminars or workshops regarding this issue.
•
Members of the Subcommittee agreed that the
regulation of internal control in public institutions and
companies is always the responsibility of executive
entities and not the Parliament. Therefore, they
proposed that the Committee not deal with this issue.
• emphasize the importance and impact of IT,
• include the concept of quality assurance in the
standards, and
• emphasize the importance of clear terminology and
ways of overcoming language difficulties.
3. Information about the task force that is preparing the
brochure on the responsibilities of management regarding
internal control.
•
The Subcommittee approved the progress report on
the brochure and the respective timetable about the
deadlines for preparing and completing the booklet.
Meanwhile, the Internal Control Standards Committee
will forward the relevant issues raised at the IInd
International Internal Control Conference to the task
force.
•
The draft brochure will be discussed during the next
session of the Internal Control Standards Committee in
Miami, Florida.
International Journal of Government Auditing–April 2001
17
• The completed brochure will be published in several
languages.
4. Organizational issues
• During the conference, the Chairman of the Internal
Control Standards Committee, the President of the
Hungarian State Audit Office, announced that during
the XVIIth INTOSAI Congress he will resign his post
as Chairman since, as of 2001, he will have been serving
in this capacity for nine years, the recommended time
limit.
• The Subcommittee proposed that the President of the
Belgian SAI take over the chairmanship of the
Committee. The Chairman informed the General
Secretary of INTOSAI about this.
The next session of the Internal Control Standards
Committee was scheduled for the beginning of April 2001 in
Miami, Florida.
Progress Report From the Auditing
Standards Committee
The Auditing Standards Committee (ASC) has
consolidated the INTOSAI members’ response to the Exposure
Draft of the Restructured INTOSAI Auditing Standards. The
ASC concluded that, besides the correction of some errors in
paragraph references, there will be no changes to the document
presented to the Congress as compared with the Exposure
Draft sent to all INTOSAI members (and available on INTOSAI’s
website <www.intosai.org>.
adding text or changing the wording of the current text, which
is not possible without an extended mandate from INCOSAI in
Seoul in October.
Many of the comments received were not possible to
accommodate within the limited mandate of the committee
from INCOSAI in Montevideo 1998. Those proposals involved
For more information, contact: Swedish National Audit
Office, P.O. Box 45070, S-104 30 Stockholm, Sweden, e-mail:
[email protected].
However, many of the ideas were very interesting and may
prove useful should the committee in the future be given a
mandate to expand or make more significant changes in the
Auditing Standards.
New Website for the INTOSAI
Working Group on Environmental
Auditing
The new website address is www.environmentalauditing.org. The website contains an overview of the
activities , products and members of the Working group, and
can supply you with guidelines and other informative material
for use by SAI’s, including information on environmental audits
18
International Journal of Government Auditing–April 2001
carried out by SAI’s all over the world. It also provides links to
other relevant websites.
For more information, contact: Netherlands Court of Audit,
Postbus 20015, N-L 2500 EA Den Hage, The Netherlands, email: www.rekenkamer.nl.
2001/2002 Calendar of INTOSAI Events
April
May
June
ARABOSAI Assembly
Rabat, Morocco
April 24-27
3rd IT Performance Audit Seminar
Ljubljana, Slovenia
May 14-16
IDI Training Specialist Symposium
Oslo, Norway
June 4-9
Environmental Auditing Seminar
Oslo, Norway
May 14-16
Public Debt Committee Meeting
Toronto, Canada
May 24-25
EUROSAI Madeira Conference
Madeira, Portugal
May 31-June 1
July
August
September
OLACEFS Congress
Panama
August20-24
AFROSAI Board of Directors Meeting
Libya
(date to be announced)
ASOSAI Governing Board Meeting
Kuwait
September 29-October 3
October
November
December
February
March
XVII INCOSAI
Seoul, Korea
October 21-27
2002
January
Editor’s Note: This calendar is published in support of INTOSAI’s communications strategy and as a way of helping INTOSAI
members plan and coordinate schedules. Included in this regular Journal feature will be INTOSAI-wide events and regionwide events such as congresses, general assemblies, and Board meetings. Because of limited space, the many training courses
and other professional meetings offered by the regions cannot be included. For additional information, contact the Secretary
General of each regional working group.
International Journal of Government Auditing–April 2001
19
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International Journal of Government Auditing–April 2001